tv Countdown to the Closing Bell FOX Business October 15, 2013 3:00pm-4:01pm EDT
right now as we're looking at the markets, you are seeing the pressure that they're feeling, dow pushing session lows. consumer staples, by the way, and consumer discretionary stocks long the biggest losers over on the s&p 500. as you can see right now, the spider consumer staples discretionary, that is actually down and so is the xly spider as well. arguably, the biggest news of the day happening right now is going to be after the close. we're going to be hearing from yahoo!, they're going to be giving us their earnings, investors and fans going to be able to ask marissa mayer questions via twitter which she's going to be asking during the company's call, and intel reporting after the bell, and we're going to find out whether lagging pc sales are weiihing down that company. we're going to be talking to the cfo. a lot happening in minutes, you don't want to move.
it all is about washington right now, the markets are watching every single headline that we're getting out of there. how much trouble are the budget and debt talks in at this hour, especially as we approach thursday's deadline? let's bring in our team, peter barnes is standing by at the white house right now, rich edson on capitol hill, nicole petallides on the floor of the feigning, and we've got sandra smith at the cme group. peter, want to start with you. the white house is trying to, i guess, if you will, gauge what's happening between the senate and the house. where do we stand? >> reporter: that's right, cheryl. the president's about to meet with house democratic leaders here at the white house to talk about next steps in their strategy. this as this surprise legislation to reopen the government, fund the government and raise the debt ceiling was dropped by, into the mix by house republicans this morning. the white house is attacking this move as potentially risking, putting the united
states in default here at this late hour as the talks over in the senate are on hold between mitch mcconnell, the senate republican leader, and the senate democratic leader, harry reid. we are waiting for whether or not this will, this house bill will actually come to a vote tonight, and i am going to let rich edson handle that piece of that when you throw over to him. cheryl: peter, let's bring him in right now. rich, you've been doing some excellent reporting of, i guess what we could call a stand still between the senate and the house, rich. >> reporter: right. and thank you, peter, but it is a standstill. you had that house republican plan come out this morning. that plan that we detailed earlier would have raised the debt ceiling, extended government spending, a two-year delay on the medical device tax, some other proposals. that does not have enough support right now among republicans to make it through the house, so house republican leaders aae figuring out their
next move. while that's happening, the negotiations between the senate majority and minority leaders, we talked about them yesterday, they were really spearheading all of the talks between democrats and republicans here, those talks are still in a pause to see what the house can do. now, there are some procedural advantages to allowing the house to go first. it can cut a few days even procedurally off this and perhaps move something quicker through the senate. but the problem still remains, there is yet -- there has yet not been a republican bill that has been put together that can pass the u.s. house, and there still is no bipartisan bill out there yet from folks in the senate. cheryl: rich, i want to be clear on something, because this is where investors have to watch and tick and tock of washington. do we expect at any point a bill to get on the house floor at all today? is that even a possibility, rich? >> reporter: it's a possibility, but right now there's nothing indicating that that's going to happen anytime soon. you never know, something could change in 30 seconds. it's the way things are going
here today. cheryl: that's the way the entire week seems to be going. nicole, this is what investors are having to watch and deal with, the dow in particular, nicole, what a day of volatility as investors, we have a deal, we don't have a deal. what are the guys on the floor telling you, nicole? >> reporter: yeah. they really are watching what we've been eeing, and you can feel the tension building, and the markets are telling you exactly that. holding on, still showing resilience and still positive since the market shutdown, but erasing some of those gains. the dow now at session lows, down about almost 110 points. the vixx, the fear index which really is compiled volatility and what to expect going forward now moving to session highs. so you are getting this sense of what's next and, hey, is it really going to be bad? are we really going to get to the deadline and go beyond it and default, or what happens to our credit rating? so this really brings the uncertainty and that wildcard t% this market, and that's why you're not seeing dow components with up arrows, you're seeing
selling across the board, the s&p 500 down over half a perccnt, the dow down three-quarters of 1%. cheryl: there you go, clipping sessson lows as i mentioned at the top of the show. let's go from the new york stock exchange to the cme, sandra, this volatility can also be applied to the gold contract. earlier gold was negative, now it looks like that safety play, sandra, is in play. >> reporter: yeah. the safe haven trade in play right now as gold prices up about $8 on the session, still below $1300 a troy ounce, but we're now at 1284, up on the day. we are seeing a market that is setting up more potentially a deal to not get done. we've seen that tune sort of change throughout the session. oil prices really a reflection of that concern, crude oil down more than a buck right now, settling lower not only here, but also in new york, the brent crude contracts down more than a dollar on the session. the speculation there would be that if we see a default, we'll see consumers using less energy, so that applied across the
board. heating oil prices, natural gas prices also done down. we're also looking at the fact that ag prices had been up today. while we're basically seeing a lot of up arrows, you're seeing that weather-related concerns in lean hogs after the blizzard in south dakota and corn prices are higher. but, cheryl, we're watching the bond market. the yields on short-term u.s. government debt continue to reflect concern there. the yield on the one month, the bill spiking to .35%, highest level that we've seen in several weeks there. so certainly some concern playing out in these markets right now. cheryl: all right. sandra, thank you very much. of course, nicole, rich, peter. all i can say is come back if you get any new information, please, we will be on standby white house or capitol hill as it all plays out. guys, thank you very much. well, let's get to our floor show and see how wall street is dealing with all of this. we've got traders at the new york stock exchange, the cme
group and, of course, the nymex. teddy weisberg at the new york stock exchange, i don't know, teddy, what do you make of all of this? at this point, look, thursday night 5 p.m. was when jack lew says, you know, this is the deadline, this is it. i don't know, do you think washington's going to cut a deal before then? i'm not so sure, teddy. >> i think it's political theater at its best, a frankly -- and i know this is probably way out on a limb -- but i think they're just giving us an opportunity to put some short-term trades here on the long side. i think you can buy these dips because there's no way they're not going to come up with some kind of magic potion, you know, to extend the time a little bit. they're creating a lot of volatility. it's just political gobbledygook, scaring people have to death, certainly scaring investors half to death, but i think it's a buying opportunity short term. cheryl: that is the way to play it, teddy. and let's go to the cme and,
daniel, same question to you as we're looking in the vixx in particular, metals showing volatility. forget oil, we can't even go there without the data from the government, daniel. what is your opinion? >> well, first off, these clowns in d.c. have found a way to make circus clowns look like intellectuals. but i agree with teddy, this is probably an opportunity to buy dips here. but i wouldn't do it today because if this doesn't happen, tomorrow i could see the s&p's opening anywhere between 15 and 25 lower because we're getting closer to that deadline. it's going to happen. i can't imagine why they can't get this done other than just to preen their feathers right now. this is really a sorry state of affairs going on in d.c. cheryl: it certainly is. i'm looking at gold, we're up $5, but again, that contract was down earlier. ira epstein, you're down at the nymex getting close to that $100 a barrel with oil, that's a key support level for that contract. you know, washington or no. >> gotcha. i'm surprised we're even above
100. i mean, gold, at least, had a bounce. but we're $2 off our highs. you know, the other thing that i didn't hear, obviously, they're trying to cut a deal, iran's trying to cut a deal with its nuclear program, maybe lift some of the sanctions, and we could see crude oil take another $5 off the market on the downside. so, obviously, you know, guys in washington, make a deal already: the president should lock these guys in a room, we're not coming out of here until we have a deal. i don't understand leadership. let's have some leadership. we're very frustrated from all the traders i'm speaking to, from the customers, and we have some light volume because nobody knows what to do. extreme volatility, light volume. cheryl: i have to go to teddy and we're only down 81, i say only because of the swings we have had on the dow jones industrials today are really making our heads spin here. i know that you are still confident in a deal, but it makes the next 50 minutes f trading, teddy, if nothing else intriguing to watch if not participate in.
>> well, listen, that's why i've been coming here every day for 44 years. i can't imagine working in a better place than that. no, i just think, you know, we understand what the volatility is all about, you know? it's not an unknown to any of us that are watching it, and i think i agree with your other two guests. i mean, this is just political nonsense. but, you know, they're putting us through it. but in here lies opportunities, and basically, i think the opportunities are on the long side, not on the short side. and so i would buy the dips. cheryl: well, we've got a lot of big earnings coming out after the bell, so there are stocks out there. gentlemen, thank you very much. do appreciate your time and your analysis as we look through all of this. we've got 50 minutes to go until the closing bell rings. as we've been reporting, here we are, the prospects of a budget debt deal are actually hanging in the balance in washington. we are going to get the very latest on all the last ditch wheeling and dealing on the hill from senator johnny isakson. he's going to be in here in just
a few moments. can't wait to talk to him. also there's this, it's show time for marissa mayer. right after the close today, earnings are coming. was it a blowout quarter for yahoo! and for ad revenue in particular? we're going to game it out for you coming up later in the show. ♪ ♪ when we made our commitment to the lf, bp had two big goals
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♪ ♪ cheryl: a power mover of the hour, molly corp., shares of the rare earth metals company trading more than 23% to the downside, the company saying it expects negative cash flow in the third quarter. the company also planning to sell $200 million in shares to raise funds. i do want to show you, this is one of the stocks we always watch, and take a look at the last year, very volatile. it's also been a very volatile year and, frankly, a volatile week in washington. now, the big news right now out of d.c. is the suspension of talks in the senate to end the budget and debt stalemate, so what's really going on inside the senate chamber? let's bring in senator johnny isakson, a republican and a member of the finance committee.
senator, thank you for being here on a day like today. -@i think the question on everyone's mind is who's going to take a bill to the ffoor first? is it going to be the house or the senate? there's a lot of confusion right now for us. can you clear this up for us, sir? >> i'll give you my best estimate. my best estimate is if the house does not pass something out by 8 or 9:00 tonight, the senate will pass something out before noon tomorrow. i think everybody believes for the house to act first is best, but if the time's running out, they don't do it by tonight, by tomorrow i think the senate will be passing a bill out. cceryl: okay. that means we would, indeed, make that deadline of thursday at 5 p.m., and we say that deadline, because that's what the treasury secretary, jack lew, has put forth to all of you, as to when this needs to be done. there's a couple of key sticking points, in particular the medical device tax. where do you stand? i know that on the gop side speaker boehner, pardon her, speaker boehner wants to see that extended for two years.
where do you stand on that particular issue? because that does affect our viewers. >> 75% of members of the senate favored repealing it in march of this year. that's a very popular move, and it would receive a lot of support. but i think we're getting could- down to the lick log as they say ii the south. we don't have a lot of time the negotiate. i anticipate what ends up passing the senate and ultimately the house will be a relatively clean cr, a relatively clean increase to the debt ceiling and keep our budget levels at the bca caps which is very important fiscally to make cuts necessary. cheryl: one of the things the house came out with today was they wanted to extend the debt ceiling short term, until february 7th. what is the sense with you and your colleagues on the senate side of that? is that something that you want the fight for as well, or is speaker boehner somewhat on his own here, senatorsome.
>> no, i think he's probably on the right track. fact of the matter is we need to open up the government, extend the cr. i would do it until the end of the fiscal year of next september, get that put to bed so there are no more shutdowns and then get ready to talk about the debt ceiling. our problem is we get deeper and deeper in debt, we need to debate how we turn that around and make some fundamental structural changes which you can only do when you have the leverage of the debt ceiling. february would be short enough term but long enough to make some substantive changes. cheryl: i don't know if you were on the senate floor this morning, senator, i'm sure you were, but senator reid made some rather inflammatory comments, and he talked about the rating agencies. they have said they have no comment on senator reid's comment, but he said that the rating agencies would, you know, cut our credit rating as soon as tonight. have you heard any of that talk on the senate floor? do you agree with senator reid at all? >> i'm very disappointed in senator reid. senator reid has the upper hand
x he knows it, but he knows our country's running out of time. we shouldn't have last minute political jousting or threatening the debt ceiling. as a leader, he should lead. let's get a bill on the floor of the senate, get it to the house and put an end to it. cheryl: okay. and is you know, senator, obviously, the two people that have really come together, it looks like there's a bipartisan meeting of the minds is senator mcconnell and senator reid. have you been privy to those conversations, has senator mcconnell come back to you and given you more of an idea of a sense of how those meetings are going between the two of them? >> they weren't going anywhere until four days ago, and then they started talking, and they started negotiating. those negotiations fell apart this morning but only as a cease fire, not as a retreat. i think they're ready to put a deal together pretty soon and get it to the floor of the% senate once we know the house is not going to act. cheryl: i know you told me the senate is ready to act. if the house, if maybe by this evening can bring something to the floor and it goes to you,
can we make the deadlinesome. >> i think we can, but the clock is running. the candle's burning low. we'd better hurry up. cheryl: okay. well, i think that leaves a lot to chance here. senator isakson, we certainly are watching every move. senator johnny isakson, thank you, sir, we appreciate your time. >> thank you very much. cheryl: all right, well, to be continuud, certainly, as we have 40 minute toss go. closing bell's going to ring whether washington has anything to say about it or not, but what is the white house saying to wall street about the deadlock on capitol hill? is the obama administration putting pressure on ceos to speak out? some have already. charlie gasparino's going to have exclusive details, coming up. ♪ ♪
business network that the white house -- and i knew this was going to happen, it was sooner or later, the white house controls everything -- but the white house is putting pressure on wall street executives to speak out more vociferously about the debt ceiling debate. from what we understand, the white house is calling executives on wall street to pressure them to pressure republicans to, basically, cave in, extend the debt ceiling. what i'm hearing from the street is that they're trying to sort of chart a middle ground, you know, try to find a way to cedd to what the white house is telling them to do. why is that? because as you know, the white house, the treasury department and regulatory apparatus that involves the banking system 'em nails from this -- 'em nails from this administration, sec, cftc, go down the line. as you know, the head of the fed is appointed by the president, con the firmed by the senate. but there we go. that's what's going on right now, it's the white house out there. and i'll tell you, cheryl, i knew this was going to happen at
some point. i got the feeling when lloyd blankfein was up there at the white house that he was all but blinking the words torture, you know? when he was, like, you know, sitting there saying how the republicans should give in and everything. [laughter] there he is, you see? torture? cheryl: i'm looking for blinking at the moment. okay. i see rich edson -- >> morse code, you know? jamie dimon, the ceo of jpmorgan chase came out yesterday, gave more happy talk about this, and this is a concerted effort, from what i understand, part of a cop certed effort by the white house to get the wall street guys to get out there. the more they talk about it, the more pressure they are putting on house republicans, essentially, to cave into any deal. at least that's what's happening now. tomorrow will be a key day. we'll see just how much is being spoken about by the wall street crowd. but, you know, i mean -- cheryl: what do they say to you? what do these guys tell you? >> listen, tear opinion is that -- their opinion is that
the 17th which is thursday, right? is a very arbitrary date. they believe that we get through the 17th no problem even though jack lew, the treasury secretary, said that is some sort of hard and fast date where major decisions will have to be made -- jack lew has said he is not going to default on the debt. they believe a more realistic date in terms of when stuff gets tight like when you really do have to make, you know, very, very strong decisions on who gets paid and what gets paid, does social security not get paid, do veterans not get paid or whatever is much more in the november 1st, 3rd, something like that area. that's when it gets really tight. again, none of that is good, i don't believe. but, clearly, listen, what is our job here to do? our job here is to sort of give you the story behind the story. why do you see wall street guys out there? these guys would like to chart a middle ground. they would like not to play politics here, but they are being prodded from what i understand by the white house to get out there and talk.
they are trying to be as bipartisan as possible. i would say that jamie dimon who is under the most pressure of any bank ceo given all the regulatory probes on him has been the most bipartisan in his remarks. it is interesting that lloyd blankfein, the ceo of goldman sachs, the pressure's really off goldman sachs, but he's being -- i mean, he's almost parodying the democratic -- cheryl: i'm sorry, blankfein or dimon? >> blank fine. if you listen to some of stuff he says, it sounds like the president said it. so that's where we are right now. you know, here's the thing, i don't like the shutdown. i don't think ted cruz is, you know, he's kind of behind this in ways. i think it's a foolhardy exercise. it is scary that you can employ a part of industry that because of regulation you control to be
your surrogates on an issue like this, you know? take out my belief, and that's what's going on now. the white house is employing wall street as their sort of water carriers on this thing, and it's -- i think, i think it's despicable. i don't like when business gets involved in politics. yes, you know, it's very good for us not to default, but this is, this is being prodded by the white house to put pressure on the republicans. like i said, i don't agree with the shutdown, but the republicans we have to point out are making, you know, what's% getting lost in all the politics here is their overall point, and, you know, i just got done introducing glenn hubbard, the dean of columbia business school, he's written a very book, entitlements are out of control. cheryl: we're not addressing the real things we need to be addressing right now. >> the reason why we can still boor row is because -- borrow is because we're the tallest midgets in the room. at some point, that's going to
stop. the republicans, at least from a long-term perspective, are talking about that. i don't know of anything on the democrat side which are dealing with entitlements -- cheryl: why would that? [laughter] >> you're right. why would they? there's a constituency that doesn't want that to stop. so here we are. cheryl: charlie gasparino, thank you very much. well, this is it, we've got 30 minutes to go. anything can happen in 30 minutes. now, what's going to happen afttr that bell rings, yahoo! is going to report earnings. is marissa mayer going to hit it out of the park? the important things you needdto watch for in that report. that's coming up. and then there's this, you've heard of bit coins, but you may never have heard of strip coins. [laughter] we're going to tell you -- >> [inaudible] cheryl: i'm telling you now. charlie missed strip coins. >> of all the people in this building -- cheryl: strip coins. ♪ ♪ [ male announcer ] imagine this cute blob is metamucil.
cheryl: breaking news coming out of washington, house gop members, they've got a new plan. let's go to peter barnes with details on what it is. peter, what do we know? >> reporter: well, cheryl, this morning's plan, it appears, but with a few changes, and they do plan to try to vote on this tonight. the new, the changed plan, the new plan would fund the government, open the government and fund it through december 15th. this is a change from what we heard this morning. they would have, their plan this morning would have funded the government through january. they would increase the tet
ceiling through -- debt ceiling through february 7th, and that is what they had this morning, that's the same as the senate bill that they're working on, the bipartisan bill over there. they would eliminate the extraordinary measures that the treasury has been allowed to take to stay under the debt ceiling since it hit the debt ceiling back in may, the house wants to get rid of those extraordinary measures like not funding government pensions temporarily. they would also include this language that would require members of congress and their staffs and the administration, the president, the cabinet, the vice president to, basically, have to buy into a health care exchange and get no government in this case, a subsidy from their employer. right now the federal government picks up about 80% of the cost of the health insurance. under this language they would get nothing, they'd have to pay for it themselves. there is, they have dropped the tax on, excuse me, the provision
on medical devices. they wanted to delay that by two years this morning, but now that is apparently gone. that is not in the senate bipartisan discussion, and they are planning to take this to the house rules committee to get it to the floor soon, this according to chad pilgrim, our colleague up on capitol hill, the capitol hill producer. that's it. cheryl: so taking that medical device tax proposal out of boehner's plan, does that give this a little more traction in the house? because i know that this morning it seemed like he really had a lot of resistance on both sides of his aisle in the house. >> reporter: yeah. i think it's more the senate than the white house said that was a nonstarter for them. mitch mcconnell, the senate republican leader, apparently agreed to that in the senate as he was talking with harry reid, and so i presume that probably what's happened here is mcconnell may have talked to boehner and said, listen, that isn't going to fly. send me something that we might be able to compromise with perhaps at least to get us, get
us all to the table and maybe try to hash something out in the next 48 hours. cheryl: and i want to close this with you, peter, for our viewers and that, okay, if something hits the floor tonight, best case scenario goes to the senate, then we can meet that deadline, correct? >> reporter: it depends on how they do it in the house. if they take an existing piece of legislation that's come over from the senate, strip it out and drop their bill and it does save a lot of time, they can send that back to the senate, but we're not sure yet. we've got to hear from the house rules committee on what vehicle they're going to use. if they go, if they start fresh, it delays things by several days. they have to start new over in the senate and probably take four or five days to get it done over there. so we're, we don't know that detail yet. cheryl: okay. peter barnes, thank you very much for clarification for all of us on what is an ever-changing story in washington. peter, thank you very much. the dow is still down. we're under 100 to the downside but, again, down 96 points, so
@ere's where investors at this point probably aren't reacting to anything because they just don't buy anything. we're going the need more clarification on what's going to happen. also getting back to business, yahoo! is going to be reporting earnings in less than 30 minutes, and we're going to get a close look at whether ceo marissa mayer's plan to turn around the company is working. we're breaking down the moot important things to watch for in this report with aaron kessler, senior analyst at raymond james, it seems the rhetoric that i'm reading and the gaming we're doing for the report, it's all about ali babb baa and what this brings to the table for yahoo!. how usual is that -- crucial is that to them? >> yeah. think of it this way, yahoo! is about $8 per share to yahoo!, betweenally baba and yao japan, that represents kind of a majority of our estimate of the share value, so roughly maybe $20 per share value combined with those two is alibaba. we equipment it's worth about
$12 per share in our yahoo! colleagues, -- calculation, andi think that's been the clear driver has been the alibaba performance. and we would definitely look for that in the earnings results tonight. cheryl: what about mobile? that's one of the things yahoo! and in particular marissa mayer has been trying to push forward, get more attraction in page views, etc., just to get yahoo! on more smartphones, frankly, around the world. is she succeeding, do you think? >> i think it's early, and yahoo! definitely has an uphill climb on the mobile side. i would look for engagement metrics they may disclose, they haven't given much so far, but we have seen some more positive engagement data suggesting some yahoo! traffic is starting to increase. so we will look for that on the call. clearly, the acquisition of tumbler, mobile i think they need to continue to improve their mobile app ecosystem, those are key things to watch. cheryl: i was going to ask you, she's made more than 20 acquisitions under her
leadership at yahoo!. what is your assessment thus far of how those acquisitions have performed, and do you think they were smart? tumbler, sure, but there's a lot of other smaller names she's picked up in the process. >> yeah. it's a lot of the small ones, i believe were hires, they probably acquired them for the talent x they're going to integrate them within the talent ecosystem as well. tumbler definitely in terms of modernization, but they definitely beefed up their talent pool on the mobile side, so that is important. cheryl: i'm looking at the stock, it's pretty much flat, down about not even 2% at this point. it's trading at 33.39, that's the last trade on it. how much of a move to the upside or the downside could you predict based on what we're going to get with these numbers? >> yeah. so i think we're expecting relatively modest results, display advertising to continue to be weak, down about 10% year-over-year, search up about 3%, so roughly in line results with that. i think what we saw last quarter was the stock trading on the
strongally i babb baa results and that's what we'll focus on again for the quarter. cheryl: really quick, i do want to follow up with one point, you mentioned the search, that is the one area that yahoo! duds seem to be making -- does seem to be making inroads and really owns the game, if you will, even above google and bing. do you think they can monetize better? that's always been the company's problem. >> yeah. in terms of search, i think that's -- they have done a better job especially with the partnership and monetizing over the last few quarters, and they still do have the microsoft revenue guarantee in place. but it's still a challenge much longer term if the user traffic is not growing much, which it hasn't. cheryl: aaron kessler, senior ap list -- analyst at raymond james, aaron's going to be back wuss once yahoo!'s earnings come out. plus we've got intel's ceo stacy smith is going to be with us following his company's earnings report, so a lot of big numbers coming on "after the bell,"
that's 4 p.m. eastern time, david asman will be here. well, the closing bell's going to to be ringing in 18 minutes. still no deal, semblance of a deal maybe. the markets have been pretty optimistic up until really today, but should you be preparing for a huge sell? we're going to talk about that. then we're going to talk about this, this coin takes center stage in sin city. we're going to tell you how you can pay for strippers using the untrackable digital currency. ♪ ♪
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strip shows over web cams using the digital currency. now, it eliminates embarrassing paper trails, who wants that? the anonymous currency famously invested in by the wink with l so -- winklevoss twins was first used for illegal transactions over the internet. so it's, i guess, no surprise that strip joints are trying to cash in as well, but that is a legal thing. anyway, we just told you that the house has a new plan that would fund the government through december 15th, and it would leave out a delay on the medical device tax that many republicans were pushing for, but will the new plan derail investor optimism, and are we going to see equities take a nose dive if there is still no deal, frankly, by thursday's deadline? we've got gary thayer and quincy crosby, prudential financial analyst. gary, i just want to get your reaction to the latest news out of d.c. that the republicans in the house are going to take
something to floor tonight and3 that we're getting closer. are you optimistic at this point? >> well, cheryl, we are optimistic. i mean, obviously, we're not seeing this process go through with smooth sailing, but i think we have taken two steps forward for every step back, and, you know, it's a little bit of a disappointment that we were getting some positive comments over the past couple of days, and now we seem to have some more obstacles to get over. but i think more likely than not we probably will get something done and work our way through this. cheryl: quincy, we've seen incredible volatility not just in equities, but also commodities as well over the last, frankly, week and a half as we've been dealing with the shutdown. if for some reason political wrangling goes south in washington and a deal is not done, what do you think the markets would do, quincysome. >> well, i mean, if it looks as though we can't fund anything, i mean, global markets are going to pull back dramatically. you're going to see a pullback in treasury markets, fixed income. it's going to be, it's going to be ugly, it's going to be very
ugly. but you know what? we don't think we're going to get there. we think we'll have an ugly ending to this, it'll be sloppy, but it'll get through. cheryl: quincy, you said a lot of international analysts, those from other countries, have said they're concerned about the overall credit rating of the united states, whether or not we get a deal on the deadline, fair enough, but that the credit rating still could be in jeopardy as the appearance of fiscal problems in washington kind of permeates throughout the next several months. and this means our economy will continue to suffer, quincy. do you think that's a possibility? >> if we don't handle the deficit, if we don't really deal with entitlements, if we just keep putting a band-aid on and kicking the can down the road, it's going to come back really to haunt us. this is the problem, no one wants to deal with the real problem. we need growth. if we have a lot of growth, we wouldn't be having this discussion because taxes would take care of it, jobs, receipts, you name it would be taking care of it. but when you're in this slow growth environment, every penny
counts, and the fact is the deficit is going to grow in any event as the baby boomers go onto medicare and medicaid. that's the albatross around this economy's neck. and everyone knows it, but no one wants to deal with it. cheryl: i want to move on to something else really quick and, gary, that is the s&p, i know your target is about 1650, 1700. a lot of these companies are expected to beat lower forecasts. i mean, at the end of the day, is there anything in earnings reports that could derail, potentially, your forecast or, frankly, the s&p for the rest of the year? >> well, you know, we're not in a strong economy, so we probably won't see strong earnings growth, but we do think we'll see close to expectations. obviously, expectations have come down a bit as we've gotten closer to the releases, but we're not expecting any major negative surprises. and right now, you know, a lot hinges more on washington than the earnings numbers. but i think a lot of people will be watching the anecdotal comments from a lot of the releases to see what the
economy's doing because we're just not getting a lot of government data at the same time. cheryl: i was going to say, gary, how do you evaluate sectors that you can recommend or not recommend whether it's industrials or consumer discretionary? i mean, e don't have data to rely on. so how do you advise your colleagues, frankly, of concern to steer their clients if we don't have the data that we need from the government? >> well, you know, used to be we mostly got data from the government, now we're getting a lot more private sources, so we're getting some good indication of what the economy's doing. it is cooling off, but, obviously, if we want the full, complete data set, we're going to need to get the government open and running again. i think what we're anticipating is that we are still in a cyclical upswing, and we're telling our clients still to invest for that cyclical upswing, so we do favor the discretionary and the industrials, as you mentioned. cheryl: quincy, same question to you. with the lack of data, how do you evaluate where to advise your colleagues as far as what
they should be doing with client money? >> you know, we're looking at some of the data we do have. rail traffic is up. that's good for industrial production, it's good for anything moving, shipping in the united states. lumber is up, by the way, and that's telling us we'll see a pick up in housing because lumber prices are coming up, demand is up. and we're also seeing chemical prices starting to rise, and that's telling us that industrial production is picking up, so what do we like? we like some of the industrials, we like technology, and we like consumer discretionary that is focused on high end and also on the housing market. cheryl: you say consumer discretionary, i had an interview earlier today with the mastercard spending vice president, that's what they do, they track where the money is going. and she was saying home goods, there was actually a big fall in home goods spending. this is for the month of september, quincy. do you think that's going to actually change to the upside for the rest of the year? >> you know, as we see mortgage rates coming down, as we see gasoline prices coming down a bit and as mortgages sort of
open up a bit, i think we'll% start to see a pick up in spending for the houses. americans, though, are buying vehicles, and with loans very attractive, americans are spending. it's just an allocation on what they're spending. cheryl: quincy crosby, gary thayer, thank you to both of you, it's good to have you, especially when you've got six minutes until this bell rings and anything can happen. we've been watching every twist and turn all day on fox business on what's happening in washington. "after the bell" starts right after the break. we've got two major earnings reports from yahoo! and intel. plus, intel's cfo, stacy smith, excuse me, is going to be joining us right after his company's release. david asman on his way in, we'll be right back. ♪ ♪ it's a growing trend in business:
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cheryl: okay. what is so intriguing but that these markets especially a day like today, we're sitting pretty much at session lows for the dow. we've seen this go through every day we have the shutdown, those last few moments even after numbers begin to settle you see a huge move to the upside or downside. you don't want to take your eyes off the dow. we're 15,188. we're down 112 points. i want to bring in my colleague david asman. we've had nothing today, in these markets, david, based on volatility out of washington. david: funny you bring up the word volatility. one thing we're looking at the vix, the volatility index. nicole petallides at the nyse. when you have a 12 to 14% jump at the vix you expect to have a pretty significant down day. >> absolutely t was a wild day on wall street. things were sort of tepid.
we started to hear from john boehner and harry reid and nancy pelosi and they are, and they aren't and we got so many mixed messages, no wonder we saw the vix go from 17 to 18 1/2. a bain of about 15%. a wild day today. cheryl: nicole, charles schwab is posting nice gains that is nice to see, one of the top performers in the s&p. what are we seeing with schwab? >> new high of charles schwab, 23-point9. we saw their profit improve in the latest quarter by 11% a winner in the s&p 500 and year-to-date and this is on more fees and activity of trading. david: good news, nicole, i bought fedex at about $60 a share about a year-and-a-half ago. the bad news i sold it about six months ago and it is right now just zooming sky-high as a result of this buyback. >> you are not doing badly, but today an all-time high for fedex as they announced more buybacks. they have a lot of cash on hand.
[closing bell ringing] we saw it moving to record levels. cheryl: here we go with the bells ringing, nicole. at any moment we'll get earnings reports from intel and yahoo! not just numbers we're getting from the third quarter, david, but the fact that we've got all of this action coming out of washington. looks like house republicans have it going on. david: house republicans will try it again. i kind of lost count. think this is the sixth attempt they had sending a bill over to the senate side to resolve the budget and debt deal. still we have no specifics in terms of what this new bill proposes although we are told it strips out that reference to the medical device tax. cheryl: i had does. david: that would not fly with the president. would not fly with harry reid. mitch mcconnell, the head of the republicans and senate, told john boehner you have to take that out. it will not fly over here. apparently he did. if there is anything in the new bill about obamacare questions whether president